Times Private Treaties gets a very public airing

11 May 2009

Miracles never cease, and Times Private Treaties (TPT), the investment arm of Bennett, Coleman & Co Ltd (BCCL), publishers of The Times of India group of publications, is suddenly the object of attention with two competing newspapers having chosen Monday, 11 May 2009,to turn their attention on it.

The first story by Shuchi Bansal and B.G. Shirsat in Business Standard, a competitor of The Economic Times, says the total value of Times‘ portfolio of the 240 companies in which it had invested cash in return for advertising has halved from Rs 2,700 crore to Rs 1,350 crore due to the stock market slump.

S. Sivakumar, the CEO and acting CFO of Times Private Treaties, contests the figure and denies the TPT model has collapsed. The total value of the business is closer to Rs 2,000 crore, he says, of which listed companies comprise only a small percentage; the unlisted companies have lost 40 per cent of their value.

Of the Rs 2,000 crore spent by BCCL in picking up stakes in companies in return for advertising, the group had served ads worth Rs 600 crore.

In other words, an inventory of ads worth Rs 1,400 crore is still to be exhausted.

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The second story datelined 11 May 2009 on Times Private Treaties is served up by the Times‘ main competitor in Bombay, Daily News & Analysis (DNA).

“We are not very happy about these [ads-for-equity] deals. This is not a healthy development. This should not happen. The Securities and Exchanges Board of India has all the powers. It should act.“

An unnamed “senior marketman” is quoted as saying: “If this is not brazen insider trading, what is?”

DNA, which puts the value of TPT’s portfolio at Rs 4,000 crore, says the story is not about a company’s bad portfolio of shares. “It’s about a toxic business model, whose noxious elements are contaminating the whole stock-market ecosystem.”